Bumi obtains authority?s approval for rights issue

IDX-listed coal mining firm PT Bumi Resources Tbk finally obtained on Thursday effective approval from the Financial Services Authority (or OJK), the Indonesian financial sector watchdog, for its planned rights issue and mandatory convertible bonds (MCB).

Nurhaida, Executive Head of Capital Market Supervisory at OJK, said on Thursday that the company has met all the required documents to issue the new shares and MCB.

Bumi Director and Corporate Secretary Dileep said the company will launch the rights issue next month.

As has been previously reported, Bumi plans to issue new shares and MCB worth a combined Rp 35.07 trillion as part of efforts to restructure its huge debts. Bumi was hoping to reduce its debts from $4.2 billion to around $1.6 billion. A lower debt ratio will allow the company to have a cleaner balance sheet and to deliver better profit for investors.

Existing creditors of the company will act as standby buyers of the rights issue program. (*)